Criticism labelled 'ignorant'

Revenue Minister Peter Dunne has taken a hard line with Dunedin North MP David Clark, labelling his criticism of Inland Revenue as mischievous, ill-informed and "downright ignorant".

"He is playing typical Opposition politics and adding one and one and quite deliberately getting five," Mr Dunne said.

The latest spat between the two men came after Dr Clark, Labour's revenue spokesman, issued a statement saying that Inland Revenue was celebrating a dubious anniversary this year.

Its computer system was 20 years old and was the prime reason behind recent stuff-ups.

"The IRD's First computer system comes dead last in supporting a functioning tax agency. There is no way it should have lasted this long and it is in urgent need of an upgrade.

"The Revenue Minister seems to have no sense of urgency about this, despite being in the role for seven years," Dr Clark said.

The plan was to upgrade IRD's systems over the next 10 years but who knew how many privacy breaches there would be in that period as the system creaked under pressure, he said.

Last week, there was a privacy breach of 30 people. In the two weeks before the tax return deadline, 70,000 phone calls to the IRD went unanswered.

"Embarrassingly IRD still has round $76 billion of tax yet to collect. The systems are falling over," Dr Clark said.

Mr Dunne said Dr Clark was wrong on every count. The recent privacy breach had nothing to do with the First computer system or IRD's online systems. Nor was it the result of staffing levels.

It was human error. Correspondence was mistakenly placed in the incorrect envelope and sent out. Recent phone issues also had nothing to do with the department's computer systems, he said.

"This issue emerged at the department's busiest time of the year, when customers could unfortunately experience some delays. As we stated publicly at the time, we understood that some people found these delays frustrating and IRD apologised to them."

The redevelopment of the department's computer system, through the business transformation programme, was IRD's top priority, Mr Dunne said. However, the system would meet projected future volume processing demands for the next five to 10 years.

Inland Revenue was developing a long-term programme of work to modernise the way it delivered tax and social policy services and that would be done through a phased approach to technology renewal.

"Dr Clark should know that such a major transformation cannot be done overnight," Mr Dunne said.